Reliance Retirement Fund
Life expectancy has increased dramatically, but retirement age is still around 60. Reliance Retirement Fund (An open ended notified tax savings cum pension scheme with no assured returns) Lambi Innings ki Taiyari NFO 22nd Jan - 5th Feb’15 Scheme re-opens for continuous sale & repurchase not later than February 20, 2015. Aim for long term wealth creation with equity component Save tax upto `46,350/- U/S 80C(2)(XIV) Pension Fund# Distributed by: Offer for Sale of Units at Rs.10/- per unit during the new fund offer period and Continuous offer for Units at NAV based prices. Reliance Retirement Fund offer two schemes : Reliance Retirement Fund – Wealth Creation Scheme & Reliance Retirement Fund – Income Generation Scheme. Investments in the schemes are subject to a lock-in for 5 years from the date of allotment, subject to the terms & conditions with respect to switches. #The Central Government specifies Reliance Retirement Fund as a pension fund for the purpose of clause (xiv) of sub-section (2) of section 80C of the Income Tax Act, 1961 (43 of 1961) for the assessment year 2015-16 and subsequent assessment years. As per provision of Sec 80C (2) (xiv) of the Income Tax Act 1961 for FY 2014-15, any individual whose taxable income is less than ` 1 crore and has made investment of ` 1.5 Lakhs in notified pension fund set up by a Mutual Fund, can save tax upto ` 46,350 including applicable cess. Tax saving will be proportionately reduced subject to the taxable income and investments. The tax benefits are as per the current income tax laws and rules and any other current applicable law. Investors are advised to consult their tax advisor before investing in such schemes. Reliance Retirement Fund – Wealth Creation Scheme This product is suitable for investors who are seeking*: • Long term growth and capital appreciation • Investing primarily in equity and equity related instruments and balance in fixedincome securities so as to help the investor in achieving the retirement goals • High risk (BROWN) *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Reliance Retirement Fund – Income Generation Scheme This product is suitable for investors who are seeking*: • Income over long term with capital growth • Investing primarily in fixed income securities and balance in equity and equity related instruments so as to help the investor in achieving the retirement goals • Medium risk (YELLOW) *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Note: Risk is represented as: (BLUE) investors understand that their principal will be at low risk (YELLOW) investors understand that their principal will be at medium risk (BROWN) investors understand that their principal will be at high risk Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Why Retirement Planning is pertinent ? Did U Know ? A 30-30 rule of thumb says an individual earns for 30 years, to provide for 30 years of post-retirement life where the individual’s income would have stopped. Yet the need to maintain similar life style exists: An expense of Rs. 1 Lakh would nearly 7 times more in 30 years due to inflation, assuming inflation rate of 7% Retirement goal is the most important life-stage goal since India’s demographics depicts trend of Higher life expectancy Increasing trend of nuclear family Absence of comprehensive social security system Yet, Retirement funds account for only 12% of one’s total savings and 78% Indians don’t save enough for a comfortable retirement Currently in India, retirement related product offerings are limited to EPF, PPF, NPS, Insurance Pension Plans, etc Globally, Retirement assets occupy a large space, (For example, in USA ~80% is the Retirement Asset/GDP Ratio) whereas India has one of the lowest Retirement Asset/GDP Ratio which is only 15% Source: RCAM Research, Towers Watson Report, HSBC Survey - ‘The Future of Retirement-It’s time to prepare’, McKinsey CEO Roundtable Report 2014 Hence, with an aim to Save and Accumulate for Enjoying Post Retirement Life RCAM offers One Stop Retirement Solution Through Reliance Retirement Fund Take advantage of equity and debt oriented scheme with an aim create long term wealth for post retirement Liquidity - Withdrawal option after 5-year lock-in, subject to the applicable exit load Flexibility - to choose investment allocations between Equity/Debt to construct your portfolio (refer salient features for further details of schemes available to invest) Convenience - do unlimited switches between equity-debt /Step-up your investments/Autowithdrawal with SWP facility on retirement Offering tax deductions for investments up to Rs. 1.5 Lakhs u/s clause (xiv) of sub-section (2) of section 80C of the Income Tax Act, 1961 (Refer SID for further details) How to Effectively Invest In Reliance Retirement Fund If You Start Late, Catch the Missed Bus By Way of Lumpsum Set Your Goal Enjoy Retirement through Auto SWP from Income Generation Plan Start Investing Through Lumpsum & SIP at an early age (25-30 years) in Wealth Creation Scheme Continue SIP in Income Generation Scheme till 60 years age Increase SIP through STEP-Up to align with your increased Income Auto transfer all your Wealth into Income Generation Scheme at 50 years age Three Steps for a Happy Retirement – Save, Accumulate and Enjoy Step 1: Save Prudently Step 2: Accumulate Retirement Corpus The Fund offers the flexibility to choose asset class, depending on your actual requirement. The Fund offers the convenience to achieve the desired retirement corpus through SIP, Lumpsum & Combination of Lumpsum & SIP Step 3: Enjoy your Retirement Investors could opt for Auto SWP in Reliance Retirement Fund to withdraw a pension based amount basis their requirement. Salient Features of Reliance Retirement Fund The Fund will have 2 Schemes: (Both the Schemes will have different portfolios) Wealth Creation Scheme - Equity Oriented (65%-100% in Equities) Income Generation Scheme - Debt Oriented (5%-30% in Equities) Auto Transfer Facility from Wealth Creation Plan to Income Generation Plan: Auto Transfer is an optional facility wherein investors' entire investment (Lumpsum/SIP) shall be switched automatically from Wealth Creation Plan to Income Generation Plan (with nil exit load) at any date as specified by the investor (which is within or after the lock-in period) or upon completion of 50 years of age. STEP UP Facility: A facility wherein an investor who has enrolled for SIP, has an option to increase the amount of the SIP Installment by a fixed amount at pre-defined intervals. This will enhance the flexibility of the investor to invest higher amounts during the tenure of the SIP, thus aligning an increase in investor’s earnings with the SIP installment over the tenure of SIP. Auto SWP Facility: This optional facility aims to provide a regular inflow of money to investors (monthly/quarterly/annual) by automatic redemption of units on or after 60 years of age. The SWP amount could be chosen basis investor’s actual pension requirements, subject to minimum SWP amount for each frequency. Liquidity: The Fund also offers liquidity and flexibility to withdraw amounts, which investors could use during times of emergency. The fund provides repurchase /switch-out facility on all Business Days at NAV based prices after an initial lock-in-period of five years in the scheme from the date of allotment of units. Lock - in Period: 5 years in the fund from the date of allotment of units. (Note: 5 years lock in period is in respect to the fund and not with respect to switch between Wealth Creation Scheme and Income Generation Scheme. Auto transfer from Wealth Creation Scheme to Income Generation Scheme is applicable during 5 year lock – in period). The Fund has an exit load of 1%, if investments are redeemed before 60 years of age. However, the load will not be applicable for intra-fund switches (even during the lock-in period of 5 years). i.e., Investors can do unlimited switches between the two schemes, without any exit load. Note: Switch of investments made with ARN code, from Other than Direct Plan to Direct Plan of a Scheme shall be subject to applicable exit load, if any. Please refer Scheme Information Document for details of the above mentioned features. Scheme Specific Risk Factors: Trading volumes and settlement periods may restrict liquidity in equity and debt investments. Investment in Debt is subject to price, credit, and interest rate risk. The NAV of the Scheme may be affected, inter alia, by changes in the market conditions, interest rates, trading volumes, settlement periods and transfer procedures. The NAV may also be subjected to risk associated with investment in derivatives, foreign securities or script lending as may be permissible by the Scheme Information Document. The Central Government specifies Reliance Retirement Fund as a pension fund for the purpose of clause (xiv) of sub-section (2) of section 80C of the Income Tax Act, 1961 (43 of 1961) for the assessment year 2015-16 and subsequent assessment years. Tax benefits are as per current Income tax laws and Rules Disclaimers: The views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. Before making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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